An attorney for victims in the Rick Siskey Ponzi scheme case filed a motion Tuesday asking for court permission to interview Siskey’s widow, Diane, in an effort to claim life insurance payouts for defrauded investors.
Siskey, 58, took his own life in December 2016, days after court filings gave the first public indication that he was under investigation for fraud. An FBI affidavit unsealed weeks later alleged that Siskey – who long sold insurance and other financial products to Charlotte clients – was operating a Ponzi scheme for years.
Court-appointed trustee Joe Grier and his team are sorting through claims from investors and accumulating assets that can be distributed to them. So far, however, the victims – who put as much as $50 million into the scheme – have yet to receive any money back in the bankruptcy court process.
In the filing Tuesday, attorney Charles Monnett III said the request to interview Diane Siskey, similar to a deposition in a lawsuit, is to “fully determine the extent of Diane Siskey’s knowledge of or participation in the Ponzi scheme, the source of any funds used to pay life insurance policy premiums from the time each policy was issued, as well as the existence of any other assets available for payment of claims of the estate.”
Never miss a local story.
Monnett, who is representing creditors in the case, said in the filing that he has not been able to reach an agreement with Diane Siskey’s lawyers to arrange an examination.
“She is resisting my efforts to be put under oath, and I think it’s high time she did it,” Monnett told the Observer.
Diane Siskey’s attorney, Thomas Walker, could not immediately be reached for comment. In the past, he has said his client “adamantly denies any wrongdoing or complicity involving the allegations made against her late husband and intends to defend herself against these accusations.”
The 13-page filing says that from 2001 until late 2016 Diane was employed by Wall Street Capitol, the financial services business started by her husband and affiliated with the MetLife insurance company. At one point, she was MetLife’s managing director for the Carolinas and was responsible for compliance functions in the two states, according to the filing.
“Diane Siskey was intimately involved in the business activities of Rick Siskey and Wall Street Capitol over a period of many years,” the filing adds.
The documents also provide new details about her husband’s life insurance policies. The trustee has previously said in filings that he believes Rick Siskey used Ponzi scheme proceeds to pay premiums. Life insurance typically pays out even in suicides if the policy is more than two years old.
One policy had a $10 million death benefit, paying $7.5 million to Diane Siskey; $2 million to the couple’s daughter, Jenna; and $500,000 to two employees. The trustee has already reached agreements to reclaim $440,000 from the employees, and he has said he’s pursuing the rest of the funds from family members. The annual premium on the policy was $129,600.
Three other policies paid Diane Siskey more than $39 million, giving her a total of nearly $47 million. She has previously offered to give $37.5 million of that amount to investors, but no agreement has been reached to turn the funds over, the filing states.
“Upon information and belief, Diane Siskey is demanding a full release from all future claims by anyone injured by the Wall Street Capitol Ponzi scheme before she will agree to the release of any funds to claimants,” the document states. “In addition, both Diane Siskey and Jenna Siskey seek to retain ownership of the remaining life insurance proceeds.”
The filing states that Diane Siskey has sought to keep the remaining life insurance proceeds to “pay any amounts due to the IRS for unreported Ponzi income.”
The federal bankruptcy court case began just over a year ago, and more than 265 investors have submitted claims. A “high percentage” of Rick Siskey’s investors are beyond retirement age and lost their life savings, according to court filings.
At a court hearing last week, U.S. Bankruptcy Judge Craig Whitley approved the general method the trustee has used to calculate “base claims” for victims. Under this approach, the trustee has taken into account how much money investors placed with Siskey and how much they received back over time, excluding any promised interest. Investors, however, could receive more over time if additional money is accumulated by the trustee.
“It’s a rare Ponzi scheme case that we even return principal to victims,” Whitley said from the bench. “This could be that rare case.”
A hearing is scheduled for Feb. 5 to discuss specific investor concerns.